The NCVYS, a representative body for voluntary and community youth organisations, has more than 200 members in England. Ambition, formerly called Clubs for Young People, represents youth club and community projects, local authority heads of services and housing associations.
The announcement comes after a series of consultation events in November and December 2015 that highlighted the need for cross-sector alliances and for a strong, shared vision for youth services, the two charities said in a statement.
A spokeswoman for the two charities said they were discussing merger options "to articulate a strong and shared vision for youth services" and to provide better value and opportunities to their national network of member organisations.
Due-diligence processes have begun and a joint working group of trustees will oversee the process, the spokeswoman said.
Because discussions are at an early stage, the eventual structure, branding and staffing of the new organisation has not yet been decided, she said.
Final decisions will be taken by both trustee boards in March, after which NCVYS members will vote on the merger proposals at an extraordinary general meeting for which 21 days’ notice will be given.
According to Ambition’s latest annual accounts, it had an income of £2.1m and an expenditure of £2.2m in the year to 31 March 2015. It has 15 staff.
The total income for the NCVYS for the year to 31 March 2015, as stated in its most recent annual accounts, was £1.2m, compared with total expenditure of £1.3m. It employs five members of staff.
Helen Marshall, chief executive of Ambition, said: "We firmly believe that closer working arrangements with the NCVYS will strengthen the national profile and voice of the youth sector, while providing better value to our memberships and ultimately improving opportunities for young people."
Susanne Rauprich, chief executive of the NCVYS, said: "Better collaboration is vital at a time when many youth organisations are struggling to secure a future. We are excited to be working with Ambition to ensure that young people continue to get the help they need despite reduced funding."